The Chicago Housing Authority has torn down all of its high rises and says it's close to completing its plans to transform public housing. Now, city leaders are moving to the next part of their plan: using public housing funds not just to build homes for poor families, but stores where they could shop and work. Some residents, however, say the city is breaking a promise to provide affordable housing.

Chicago Housing Authority CEO Charles Woodyard envisions neighborhoods in some of the city's poorer areas bustling with a mix of poor and middle-class residents, grocery stores and other shops. Throughout the city, he says, areas that thrive are full of mixed-income development. "I see huge amounts of commercial, retail everywhere, a lot of shopping," he says.

One group of public housing residents says that would be fine if none of them are driven out. Recently, they gathered outside the Cabrini-Green row houses — not far from Chicago's downtown skyscrapers — to announce that they are suing the housing authority. The last of Cabrini's high rises were demolished two years ago, and there are plenty of mixed-income developments nearby. Carole Steel has lived most of her life in Cabrini. She doesn't think much of the housing authority's new phase, the so-called Plan Forward.

"To me it's about a land grab," Steel says.

Only about a third of the 600 row houses are rehabbed. The rest sit vacant and shuttered behind a chain-link fence. The Chicago Housing Authority (CHA) had promised that all public housing residents could return, but many are still living in temporary housing and want to come back to their neighborhood.

"We have all the expressways right at our fingertips, all the 'L' stops right at our fingertips, and we got a multitude of stores. So this is the great opportunity area, so why try to chase us out of this area?" Steel says.

The vacant row houses sit at the heart of a dispute over Chicago's massive public housing overhaul and the mission of public housing itself. Despite the promise to residents, there are questions about the future of the homes. A few years ago, the CHA announced that the row houses would become a mixed-income development. Now officials say there's been no final decision.

Woodyard agrees there is a dire need for affordable housing in Chicago. But he says the country has seen how urban neighborhoods made up solely of public housing work. And, he says, they just don't work.

"I think evidence and the research shows that that is not a model that allows families to move up and out of subsidized housing. It's not a model that proves to be conducive to public safety and being good neighbors to the surrounding community. It is not the model we want to pursue in Plan Forward," Woodyard says.

'A Housing Intervention'

Cabrini residents are suing the CHA in federal court. Attorney Elizabeth Rosenthal calls any plan to demolish the row houses illegal and says they all should be rehabbed so former residents can return to the racially diverse neighborhood.

"CHA failing to do that violates the Fair Housing Act, perpetuates segregation and discriminates against low-income and African-American families," Rosenthal says.

Chicago's years-long public housing experiment has been closely watched by agencies throughout the country and by researcher Susan Popkin with the Urban Institute. She and her team kept in touch with several CHA families who were relocated when their buildings were torn down.

"They live in better housing and safer neighborhoods. They feel better for the most part. They feel less scared. They feel less anxious. That's a success. This was basically a housing intervention," Popkin says.

But some goals went unmet. The CHA says it aims to transform lives, but many of the 38,000 families using vouchers to rent in the private market often ended up in other racially segregated and poor neighborhoods. And children in CHA families didn't see much improvement in their lives.

Those are problems the CHA says its new Plan Forward could change. It calls for the agency to acquire and rehab apartments and homes in different communities, to offer more social services to adults and children, and to use some CHA land for something other than housing to help provide jobs and other opportunities.

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Transcript

RENEE MONTAGNE, HOST:

Good morning. I'm Renee Montagne. You can spend tens of thousands on a liberal arts degree, or just buy a fake diploma. The artist David Hockney's fake diploma is expected to sell at auction this week for up to $27,000. He created it in 1962 when he was denied a real degree by the Royal College of Art because he refused to write a final essay. And who know? The work of a famous artist might end up worth more in the long run than a real diploma.